South African central bank says crypto will be regulated as a financial product, not a currency
The South African Reserve Bank (SARB) deputy governor, Kuben Naidoo, said the central bank will introduce regulation in the next year or more that will aim to regulate cryptocurrencies as a financial asset
Regulation is necessary to bring the industry into the mainstream, but in a way that separates the hype from useful technologies, Naidoo said
Various crypto policies are currently being formulated as the financial regulator in South Africa and the SARB continue the drive to introduce a crypto regulatory framework in the country
South Africa’s approach to crypto regulation is in line with other countries around the world, Naidoo noted. Speaking at the Think Big webinar, Naidoo made it clear that the central bank is looking to regulate cryptocurrencies as digital assets, a financial product, and not as currencies.
“There is a need to regulate it and bring it into the mainstream, but in a way that balances the hype and with the investor protection that needs to be there,” he said. Cryptocurrency exchanges will also have to comply with know your customer (KYC) and other control regulations that apply in the traditional financial services industry. Luno has been following these regulations from outset.
If regulated as a financial product, cryptocurrencies will fall under the jurisdiction of the Financial Intelligence Centre (FIC). The regulation is expected to be rolled out within the next 12-18 months.
“Whether [crypto] goes up or down is not the question here,” Naidoo said, explaining that the job of the central bank is to provide regulation that creates a safe investment environment for South African investors.
To see what other regulators have in store for cryptocurrency, check out the Luno learning portal.